Financial Sector (Shareholdings) approval to hold a stake No. 9 of 2026 - Wise Australia Pty Ltd

Overview

The Financial Sector (Shareholdings) Act 1998 was enacted to safeguard Australia's financial system by controlling significant holdings in financial sector companies. This legislation addresses the problem of potential risks to the stability and integrity of the financial sector arising from significant foreign ownership or control of Australian financial institutions. Enacted by the Australian Parliament, the policy objective of the Act is to ensure that significant shareholdings in financial sector companies are assessed to determine whether they pose a risk to the national interest, particularly in relation to financial stability and systemic risk. The Act empowers the Treasurer to approve or disapprove significant shareholdings, thereby maintaining a robust regulatory framework to protect the interests of consumers and the broader economy. This notifiable instrument, dated 27 March 2026, pertains to the approval of Wise Payments Ltd, Wise Financial Holdings Ltd, Wise plc, and Wise Group plc to hold stakes exceeding 20% in various Wise entities. Bernadette Donovan, acting as a delegate of the Treasurer, has determined that it is in the national interest to approve these shareholdings. The instrument will be registered on the Federal Register of Legislation and will remain in force indefinitely. Section 19 of the Act facilitates flow-on approvals for related financial sector companies, ensuring comprehensive oversight of significant shareholdings.

Scope and Application

The Financial Sector (Shareholdings) approval to hold a stake No. 9 of 2026 pertains to Wise Australia Pty Ltd and the Financial Sector (Shareholdings) Act 1998. This Act applies to entities seeking to hold a stake of more than 20% in financial sector companies, specifically targeting the national security and integrity of Australia's financial system. The approval granted under this Act is directed towards the applicants listed in Schedule A: Wise Payments Ltd, Wise Financial Holdings Ltd, Wise plc, and Wise Group plc. The approval allows these entities to hold their respective stakes in Wise Australia Pty Ltd, Wise Payments Ltd, Wise Financial Holdings Ltd, and Wise plc, ensuring they are in compliance with the legislative requirements. This legislation has a national reach, extending to all entities involved in financial transactions within Australia's borders. The approval granted is contingent upon the determination that it is in the national interest, as stipulated by the Treasurer or their delegate. The Act also allows for flow-on approvals, ensuring that the approval extends to subsidiary companies and their officers, thereby maintaining a comprehensive oversight of financial holdings.

Key Provisions

The main operative sections of this notifiable instrument relate to the approval of certain shareholdings within financial sector companies, as outlined in the Financial Sector (Shareholdings) Act 1998. Specifically, section 13(1) of the Act allows for applications to the Treasurer for approval to hold stakes of more than 20% in these companies, and section 14(1)(a) permits a delegate of the Treasurer, such as Bernadette Donovan, to approve such applications if satisfied that it is in the national interest. In this case, Bernadette Donovan has approved the applicants to hold specified stakes in Wise Payments Ltd, Wise Financial Holdings Ltd, Wise plc, and Wise Group plc, which are all financial sector companies. This approval is in line with the requirements set forth in the Act and the interpretation of terms such as 'stake' and 'financial sector company' as defined in the Act and Schedule 1. The obligations imposed on the parties governed by this Act include the necessity to apply for approval if they wish to hold a stake of more than 20% in a financial sector company. The applicants, in this instance Wise Payments Ltd, Wise Financial Holdings Ltd, Wise plc, and Wise Group plc, must ensure that they meet the criteria and provide the necessary information to satisfy the Treasurer or their delegate that the approval is in the national interest. Additionally, the Act mandates that the Treasurer or their delegate must give a copy of the instrument to the relevant financial sector company. There are also provisions for flow-on approvals as detailed in section 19 of the Act, which apply if the approved company is a holding company for an authorised deposit-taking institution or an authorised insurance company. Breaching the provisions of this Act can lead to various civil or criminal consequences, depending on the nature and severity of the breach. While the specific penalties for non-compliance are not detailed in this instrument, under the general provisions of the Financial Sector (Shareholdings) Act 1998, penalties can include fines and, in more severe cases, imprisonment. The maximum penalties would be determined based on the specific provisions of the Act that are contravened and the relevant legislation governing penalties for breaches of financial sector regulations. The approval process and the obligations of the applicants are designed to ensure compliance and protect the national interest by regulating significant shareholdings in financial sector companies.